The Insurance Council of Australia (ICA) has joined global peers in calling for a two-year delay on implementation of a new accounting standard for insurance contracts.

It is among nine signatories to a letter urging the International Accounting Standards Board (IASB) to give the industry more time to prepare for International Financial Reporting Standard (IFRS) 17, which is scheduled to take effect on January 1 2021.

Spokesman Campbell Fuller told insuranceNEWS.com.au that “ICA and the other associations are committed to implementation of IFRS 17”.

“However, more time is needed to satisfactorily work through issues such as the treatment of reinsurance when it covers onerous underlying contracts and changes to the presentation of certain assets and liabilities on the balance sheet.”

The Insurance Council of New Zealand is another signatory to the letter.

“It’s better to bring it in right than to push to meet a deadline that insurers globally are finding challenging,” CEO Tim Grafton told insuranceNEWS.com.au. “We hope the International Accounting Standards Board is receptive to the call for a deferral.”

IFRS 17 is one of the most significant changes to insurance accounting requirements in more than 20 years.

“There is no expectation that a delay will result in insurers stopping or slowing their implementation project,” the letter to IASB Chairman Hans Hoogervorst says. “The industry recognises its responsibility for proposing solutions and we are liaising across our markets with the aim of providing timely progress on the necessary improvements to IFRS 17.”

The letter says deferring implementation will allow “for the finalisation of related regulatory changes as required in some jurisdictions, for better change management… on the new and potentially very different financial reporting going forward”.